What exactly is money laundering?

Question

ive heard some descriptions but none make sense. what is the easiest way to explain what money laundering is

Answer 1

It's a way of being able to show that the money you have didn't come directly from an illegal activity.

For example...Some people use illegal money to invest in the stock market.  The profit they make can be tied to the market, but not the illegal activity that got them into the market.

Some people launder it through casino's also.

Answer 2

money laundering is when criminals make their criminal income into a fake legit means that they obtained the income rather than claiming to means as detrimental as the crimes, finding the money of a missing person etc. and to avoid tax evasion charges.

Answer 3

taking illegally obtained money and arranging for it flow through the bank account of a supposedly legitimate enterprise to create a paper trail / audit trail for the money so that it appears to be the result of a legitimate enterprise.

Answer 4

its when criminals set up fake companies to handle the money they acquire illegally, like through drugs

the companies then pretend the money belongs to them, and in that way the money becomes "clean" or "laundered"

Answer 5

You take money that was made illegally and turn it into money that appears to have been made legally, there are many ways to do this.  

Answer 6

Taking money from criminal enterprises, and putting it in the accounts of legitimate businesses/and or depositing it in overseas accounts.

The point being to avoid using cash for purchases, which is suspicious.  See, if you made 50k in a drug deal, and walked the cash into a car dealer to buy a car, you might raise some eyebrows.  

But if you give the cash to your brother, who owns a liquor store, and he deposits it, mixed in with all his legitimate cash, and then writes you a check to put in your bank, and then you write a check for the car...those all look like legitimate transactions.  He can spread the 50k over a months receipts, and who's going to notice.  And you can just say he was repaying a loan with the check he writes you, etc,